Millennial Money summary

Some people think, “I don’t have to invest for the future because when I retire, I’ll have a pension!” But what if you don’t?

It’s a real possibility. After all, America’s population is aging, leading to increasing pension costs for the government.

If you’ve decided to start investing in the stock market, you’re probably wondering where to begin. Well, the first guiding principle is to invest in companies all across the world.

Many people don’t follow this advice: They put all their money into a few companies located in just one country.

Many people determine their investment strategies by what the “experts” recommend.

And often those investment experts will recommend a tactic called Sector Leaders Strategy – that is, buying shares of the best-performing companies determined by a particular market index, which tracks a portion of the stock market. The Standard & Poor 500, for example, is based on the biggest customers listed on the exchange.

As we’ve already seen, being different is the best investment approach. So let’s examine this principle a little more closely.

For our purposes, the ideal investment strategy – let’s call it the Millennial Money Strategy – can be summarized thus: Buy cheap stock from valuable companies.

Humans are hard-wired to make investment mistakes; essentially, we’re programmed to be irrationally fearful.

In fact, it’s even been scientifically proven that we’re subject to something called constructive paranoia – that is, excessive sensitivity to loss.

Sometimes inexperienced investors think they need to sell their shares as soon as they start losing value. And yet, this kind of short-term thinking typically isn’t profitable.

So why do we go for it in the first place? Well, our biology plays a big role: Humans have an emotional center, located in the brain (the limbic system), that pushes us to make decisions that will provide instant gratification.